AO 2023-03: State party committee’s establishment of legal fund to challenge state law
The Colorado Republican State Central Committee (the committee) and its chair may establish a legal fund to challenge a state law without the funds received and spent constituting contributions or expenditures because they would not be made for the purpose of influencing any election for federal office. The Commission also concluded that the legal fund would not be engaged in Federal Election Activity or activity in connection with a federal election.
Background
The committee is empowered to make all rules for Republican party government in the state. It maintains several segregated funds, including a federal account registered with the FEC. In 2016, Colorado adopted Proposition 108, which changed the process for political parties to nominate a candidate for a general election, creating a semi-open primary system that permits unaffiliated voters to vote in a major party’s election.
The committee seeks to establish a legal fund solely for the purpose of challenging the constitutionality of this law. The fund would accept unlimited contributions from individuals, political committees, corporations, and labor organizations. The committee’s chair would establish the fund and appoint an independent governing board, none of whom would be federal candidates or officeholders. The board would make all solicitations for the legal fund separately from any solicitation for the committee or any other federal political committee. The solicitations would also include a letter stating the purpose of the fund and noting that no amounts given to the fund would be used for the purpose of influencing any federal election.
Analysis
Under the Federal Election Campaign Act (the Act), a contribution includes “any gift, subscription, loan, advance, or deposit of money or anything of value made by any person for the purpose of influencing any election for Federal office.” Expenditures include “any purchase, payment, distribution, loan, advance, deposit, or gift of money or anything of value, made by any person for the purpose of influencing any election for Federal office.”
The Commission has previously concluded that donations to and disbursements from legal funds established to finance litigation about the political process were not made “for the purpose of influencing any election for federal office.” Consistent with those prior opinions, the Commission stated that, to the extent the committee’s legal funds were used exclusively to litigate the constitutionality of Proposition 108, they were not made for the purpose of influencing any federal election. As a result, donations to and disbursements from the legal fund would not be contributions or expenditures under the Act.
State party committees generally are not prohibited from soliciting or receiving funds outside the Act’s amount limitations and source prohibitions for their segregated accounts to finance nonfederal activity. State party committees may finance Federal Election Activity only with funds that are subject to the limitations, prohibitions, and reporting requirements of the Act. The committee explicitly represented that no money received by the fund would be used for activities included in the definition of Federal Election Activity.
Under the facts presented, the Commission found disbursements from the proposed legal fund would not constitute federal election activity and would not be considered to be made “in connection with a Federal election” under the Act.
Date Issued: May 4, 2023; Length: 9 pages
Citations
Regulations
11 CFR § 100.24
Federal election activity
11 CFR § 100.52(a)
Definition of contribution
11 CFR § 100.111(a)
Definition of expenditure
11 CFR § 300.32(a)
Expenditures and disbursements; Federal funds
11 CFR § 300.30(b)(1)
Types of accounts; Non-federal accounts